“Oil prices may rise by another 40 percent”
Restrictions on Russia’s energy resources could push up oil prices by another 40 percent on world markets.
This was stated by Gennady Ryabtsev, director of special projects at the Psyche Scientific and Technical Center.
He noted that in response to Russia’s intervention in Ukraine, the United States, Canada and the European Union have announced an embargo on hydrocarbon imports from Russia. Overall, the impact of these restrictions, which can only be assessed in 2023, will be long and uncertain. At the same time, a significant increase in oil prices on the world market is possible.
He believes that other suppliers will be able to compensate for these volumes and meet the expected increase in demand: “As they do not guarantee an increase in production, the price of Brent oil will rise to $ 140-150 per barrel by the end of 2022.” This will increase oil prices by 30-40 percent in importing countries.
Ryabtsev’s analysis shows that Russia’s financial losses from the oil embargo will not be significant enough to prevent it from financing the war in Ukraine.
Ryabtsev’s analysis shows that Russia’s financial losses from the oil embargo will not be significant enough to prevent it from financing the war in Ukraine.
“Russia’s losses from the embargo are not enough to reduce its revenues to stop or cut funding for the war in Ukraine,” he said. Simply removing 3% of world oil consumption from the market could lead to situational fuel shortages in countries with restrictions. “Partner countries and Ukraine need to work together to compensate for the risks and critically limit Russia’s financial resources to wage an aggressive war.”